The most well known and widely quoted economic indicator is the CPI (Consumer Price Index). It represents an estimation of the change in prices of consumer goods and services. Generally, it represents a measurement of our expenses on goods and services we use to meet our day-to-day needs. Severe problems to the overall economy can be caused if the prices of consumer goods and services are abruptly changed. This paper attempts to examine the factors that influence the Consumer Price Index. We observe four variables, namely, money supply, gross domestic product, interest rate, and share price. By utilizing quarterly data from 1996 to 2008, this study applies multiple regressions method to find the best model and factors which can explain Consumer Price Index. The result indicates gross domestic product, interest rate, and stock price significant effect to consumer price index, whereas money supply does not have significant effect. This study also finds that the highest Adjusted R2 as goodness criteria of the model is derived when we include all the factors in the model. Hence, we can conclude that those factors have either strong or weak contribution to consumer price index. Keyword: Consumer Price Index,

1. INTRODUCTION

From the beginning of civilization, tribes, countries and nations have always been looking for ways to attain prosperity and growth so as to improve the standard of living for their own people. From the times of Caesar to leaders of today such as John F. Keneddy, things haven’t changed much. To attain prosperity one of the most important things is to maintain a healthy economy. However there are many factors that threaten a healthy economy such as inflation, economic recessions and many other factors. Despite all these threats and inevitable slumps and declines in economy, an economy can be monitored and as such Consumer Price Index is one of the most important economic indicators. Using consumer pricing index, the health of the economy can be in check and the state can take necessary preventive measures otherwise not taken could lead to devastating effects in the form of high unemployment, bankruptcies, major financial losses etc.

The CPI is a fixed-basket price index as it represents the price of a constant quantities basket of goods and services purchased by the average consumer. CPI is one of the most frequently used statistics for identifying periods of inflation or deflation. This is because large rises in CPI during a short period of time typically denote periods of inflation and large drops in CPI during a short period of time usually mark periods of deflation. It is compiled by the Department of Labor's Bureau of Labor Statistics. In order to get the final result for the CPI, wide researches of the prices of the included in the consumer basket goods and services are made. Then they are entered into a special computer program that makes the calculations.

The importance of CPI is viewed in the fact that the estimations of other products, services and benefits are directly linked to the levels of the CPI. For example, if the CPI experiences an increase in its value, then the Social Securities benefits will rise as well. Other things that are directly linked to CPI include: • Wages

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...ConsumerPriceIndex
The ConsumerPriceIndex (CPI) is a measure of change in prices over a period of time. The CPI is made up of a fixed basket of goods that is used to determine one’s CPI. The basket of goods consists of services and goods like food, education, transportation, apparel, housing, and beverages. Some examples of these goods are cereal, milk, cheese, prescription drugs, jewelry and new vehicles (“ConsumerPriceIndex” 2010). The basket of goods are reviewed every ten years, which is a major downside to the CPI because it doesn’t keep the system up-to-date. Another major downside to the CPI is it only takes in account people from urban areas and does not accurately reflect the people living in rural areas. This is a downside because 65-75% of our population lives on the coastline. A major use of the CPI is adjusting the dollar value. “The CPI is often used to adjust consumers' income payments (for example, Social Security) to adjust income eligibility levels for government assistance and to automatically provide cost-of-living wage adjustments to millions of American workers” (“ConsumerPriceIndex” 2010). Another use of the ConsumerPriceIndex is it acts as a deflator of other economic series. Examples of these series...

...The consumerpriceindex or CPI is a more direct measure than per capita GDP of the standard of living in a country. It is based on the overall cost of a fixed basket of goods and services bought by a typical consumer, relative to price of the same basket in some base year. By including a broad range of thousands of goods and services with the fixed basket, the CPI can obtain an accurate estimate of the cost of living. It is important to remember that the CPI is not a dollar value like GDP, but instead an index number or a percentage change from the base year.
Constructing the CPI
Each month, the Bureau of Labor Statistics publishes an updated CPI. While in practice this is a rather daunting task that requires the consideration of thousands of items and prices, in theory computing the CPI is simple.
The CPI is computed through a four-step process.
The fixed basket of goods and services is defined. This requires figuring out where the typical consumer spends his or her money. The Bureau of Labor Statistics surveys consumers to gather this information.
The prices for every item in the fixed basket are found. Since the same basket of goods and services is used across a number of time periods to determine changes in the CPI, the price for every item in the fixed basket must be found for every point in time....

...ConsumerPriceIndexConsumerPriceIndex (CPI) in India comprises multiple series classified based on different economic groups. There are four series
1. CPI UNME (Urban Non-Manual Employee)
2. CPI AL (Agricultural Labourer)
3. CPI RL (Rural Labourer)
4. CPI IW (Industrial Worker)
Central Statistical Organization is responsible for calculating and publishing the CPI UNME series, while Department of Labour is for others CPI indexes. All above CPI’s are calculated based on the base year 1982. The National Statistical Commission (2001) recommended that there should be three indexes for – rural, urban and all India. So from February 2011 CSO publish CPI(urban), CPI(rural) and CPI(combined) instead of the CPI(UNME) on base 2010 = 100. New CPI indexes are release by the Ministry of Statistics and Program Implementations, Government of India every month. They first publish the provisional indices and then final. Giving example in month of August, 2012 concerned ministry provides the provisional CPI data for month of July and final data for June. Price data are collected from selected towns by the Field Operations Division of NSSO and from selected villages by the Department of Posts. Price data are received through web portals being maintained by the National Informatics Centre.
To calculate the CPI numbers, we need consumption pattern i.e....

...Each Item from Month 1
16-17
Percentage of Expenditure on Each Item from Month 2
18-19
Personal CPI and Inflation Rate Calculations
20
Bias Effects on CPI from Observations
21-23
Conclusion
24
Works Cited
25
Introduction
Analyzing the ConsumerPriceIndex (CPI) is an important part of macroeconomics. CPI is a priceindex computed each month by the Bureau of Labor Statistics using a bundle that is meant to represent the “market basket” purchased monthly by the typical urban consumer. The CPI is often used to calculate the inflation rate in the economy from time to time. But even though CPI can be a useful tool to measure inflation, it doesn’t always measure it accurately due to some biases in the consumption behavior of consumers. In this paper, the method of calculating CPI and the inflation rate are first shown by creating two sample CPI baskets in two different months. Later, several consumer choice biases are also observed in a real situation and the effects of these biases on the CPI calculations and inflation measurements are discussed thoroughly.
Ten Items Data from First Month (June 2013)
Ten Items Data from Second Month (July 2013)
Items
Price
Butter (454 g)
$3.47
Milk 1% (4L)
$4.56
Eggs, large (1 doz.)
$2.78
Bananas (1 kg)
$1.94
Whole Grain Bread (600 g)...

...ConsumerPriceindex- has absolutely no impact on prices, it will not change prices!
Possible reasons for it to be inaccurate:
1) New products and technology- tendency to lag the advantage of a new technology. By the time they start incorporation the price it is already cheaper, but they use the higher price. This can cause a problem.
2) Quality of products changes- You may be getting more for your money. This can be a negative thing to because you could end up paying for things you do not need or want. Ex) Calculator- do you need everything on it, do you know how to use everything on it.
3) Growth in discounting - doesn’t take into consideration things sold at discount prices, it instead indexes them as lower quality goods instead of discounted items.
4) Nonmarket goods- ex) housing markets- rent if renting is better price, buy if buying is better.
5) Substitution effect -
The idea that as prices rise (or incomes decrease) consumers will replace more expensive items with less costly alternatives. Conversely, as the wealth of individuals increases, the opposite tends to be true, as lower-priced or inferior commodities are eschewed for more expensive, higher-quality goods and services - this is known as the income effect.
Although beneficial to some (i.e. discount...

...﻿New Series of ConsumerPriceIndex Numbers for Industrial Workers
on base 2001=100
1. OBJECTIVE
Labour Bureau, since its inception, has, inter-alia, been entrusted with the responsibility of compilation and maintenance of the ConsumerPriceIndex Numbers for Industrial Workers (CPI-IW). The CPI-IW purports to measure the temporal change in the retail prices of fixed basket of goods and services being consumed by the target group i.e. an average working class family and thus, is an important indicator of the retail price situation in the country. The CPI-IW is mainly used for the determination of dearness allowance being paid to millions of Central/State Government employees as also to the workers in the industrial sectors besides fixation and revision of minimum wages in scheduled employments. The main objective of the CPI-IW (new series) was to update the base year of the previous series of ConsumerPriceIndex Numbers for industrial workers (Base 1982=100) to 2001=100.
2. MAIN CONSTITUENTS
Three most important constituents of the CPI-IW are the centre specific weighting diagrams, the retail price data and the house rent data.
A. Updation of Weighting diagrams
(I) Conduct of Income & Expenditure Survey:
The field staff of the National Sample Survey Organisation (NSSO) through...

...The ConsumerPriceIndex (CPI) is designed to provide a broad measure of changes in retail prices experienced by Malaysian households as a group and should not be expected to exactly reflect the experience of any individual household. Laspeyres formula is used for calculating the index which is based on items that are locally consumed reflecting the spending habits of the average Malaysian. Thus the CPI is seen as a general indicator of the change in retail prices paid by households for goods and services. It is most widely used indicator of inflation for consumption expenditure. CPI measures the changes in the general level of prices of a fixed basket of goods and services which represents the items which are normally consumed by an average household in Malaysia with reference to the base period. The CPI basket includes those goods and services which are important in terms of the size of the expenditures made by Malaysian households. It is neither practical, nor necessary, to include all the items that consumers buy since many items show similar price changes. Hence, by selecting representative items (or samples) carefully, it is possible for the index to reflect price changes for a much wider range of goods than just those observed directly. The Weight of an item in the CPI is derived from the expenditure on that item...

...statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is a priceindex that tracks the prices of a specified basket of consumer goods and services, providing a measure of inflation.
\CPI is a fixed quantity priceindex and considered by some a cost of living index. Under CPI, anindex is scaled so that it is equal to 100 at a chosen point in time, so that all other values of the index are a percentage relative to this one.
Economists Shunmugam and Prasad say it is high time that India abandoned WPI and adopted CPI to calculate inflation.
India is the only major country that uses a wholesale index to measure inflation. Most countries use the CPI as a measure of inflation, as this actually measures the increase in price that a consumer will ultimately have to pay for.
"CPI is the official barometer of inflation in many countries such as the United States, the United Kingdom, Japan, France, Canada, Singapore and China. The governments there review the commodity basket of CPI every 4-5 years to factor in changes in consumption pattern," says their research paper.
It pointed out that WPI does not properly measure the exact price rise an end-consumer will experience because, as...